Net investment income tax

Grouping activities may benefit private equity fund principles

INSIGHT ARTICLE

Many private equity funds earn the type of income that would at first glance be subject to the 3.8-pecent tax on net investment income; however, income from trades or businesses held by the fund may escape the tax, as many other types of income which inure to the principals or managers of a fund. This article will explore how the net investment income tax may apply to private equity funds and any courses of action that may be available to help minimize the tax.

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